Voting interest

Voting interest

Voting interest in business and accounting is a percentage of voting stock owned. This notion is different from economic interest that refers to a percentage of all the equity issued, including preferred stock, warrants, and so on. Ownership of more than 50% of voting shares gives the right of control and consolidation. In special cases, control is possible without having to own more than 50% of voting stock. For example, if agreed, shareholders may pass control to a chosen one owning much fewer shares.

Example

Company ABC has issued 1,000,000 ordinary shares and 500,000 preferred shares. Company XYZ buys 700,000 voting shares and 100,000 preferred ones. Therefore, its voting interest is (700,000/1,000,000) = 70.00%, and its economic interest is ((700,000+100,000)/(1,000,000+500,000)) = 53.33%.


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